ITAT Reduces Penalty to Rs 10,000 for Non-Response to Notices, Citing Assessee's Depression and Business Loss [Read Order]
The two member Bench composed of Aby T Varkey(Judicial Member) and Amithabh Shukla(Accountant Member) after carefully reviewing the contents of the affidavit submitted by the assessee, the Bench was of the opinion that a penalty of Rs. 10,000 is adequate to address the issue of non-compliance with the notices
![ITAT Reduces Penalty to Rs 10,000 for Non-Response to Notices, Citing Assessees Depression and Business Loss [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/12/ITAT-ITAT-Chennai-Income-Tax-Appellate-Tribunal-ITAT-Penaty-Reduction-case-taxscan.jpg "ITAT Reduces Penalty to Rs 10,000 for Non-Response to Notices, Citing Assessees Depression and Business Loss [Read Order]")
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) reduces the penalty levied upon the appellant by Commissioner of Income Tax (Appeals). Jayasakthi Knit Wear,appellant-assessee approached the Tribunal against the decision made by CIT(A0. The primary issue raised by the assessee pertains to the order passed by the CIT(A), which upheld the penalty imposed under Section 271(1)(b)...
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) reduces the penalty levied upon the appellant by Commissioner of Income Tax (Appeals).
Jayasakthi Knit Wear,appellant-assessee approached the Tribunal against the decision made by CIT(A0.
The primary issue raised by the assessee pertains to the order passed by the CIT(A), which upheld the penalty imposed under Section 271(1)(b) of the Income Tax Act, 1961. The penalty, amounting to Rs. 40,000, was levied for the assessee’s failure to respond to notices issued by the Assessing Officer ( AO ) on four separate occasions. The assessee's defense is that due to significant financial losses incurred in the business, the assessee was unable to respond to the notices, which led to a state of depression. As a result, the assessee contends that the failure to comply with the AO’s notices was not willful but rather a consequence of the mental distress caused by the financial setbacks. Furthermore, the assessee submitted an affidavit requesting leniency, seeking a reconsideration of the penalty on humanitarian grounds. Despite this, the CIT(A) upheld the penalty, confirming the levy of Rs. 40,000.
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The two member Bench composed of Aby T Varkey ( Judicial Member ) and Amithabh Shukla ( Accountant Member ) after carefully reviewing the contents of the affidavit submitted by the assessee, the Bench was of the opinion that a penalty of Rs. 10,000 is adequate to address the issue of non-compliance with the notices.
In light of the circumstances outlined in the affidavit, which explain the difficulties faced by the assessee, we find it appropriate to reduce the penalty. Therefore, the Bench directed the CIT(A) to modify the order by deleting the penalty of Rs. 30,000/- and confirming a reduced penalty of Rs. 10,000.
In Conclusion,the appeal was partly allowed.
To Read the full text of the Order CLICK HERE
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